Apple's Passbook is a small, but significant step for m-commerce

Thursday 19 July 2012 | 13:21 CET | Background

Apple will enter the m-commerce space with Passbook, an app that stores tickets and coupons and uses QR-codes to display them. While Apple controls some aspects of the technology, it will leave it mostly to merchants and software developers to come up with services. Apple Passbook app will be launched commercially in the fall. It creates a type of wallet on the iPhone, for tickets, coupons, boarding passes and loyalty cards. Users select a pass and show a QR-code on the screen, ready to be scanned.

Passbook offers a number of smart features that integrate deeply in the smartphone OS. For instance, the phone can display relevant coupons or tickets on the lock screen, based on time and location. For now it is about ticket aggregation, so you can combine tickets and loyalty cards in one convenient place, receive offers and quickly access detailed product information, warranties, receipts and the like. Merchants can use the data that users volunteer for targeted actions and offer integrations with Facebook.

Passbook has many benefits and it can be expected that many merchants will use it. However, Passbook is no iTunes. The revenue model has to be different. Apple takes 30 percent of the revenue from music sales. The music labels (grudgingly) accept that iTunes sells a lot of their songs and that Apple has increased volume for them. There is however a difference between music and other goods. A song is made once and sold many times, but a new newspaper has to be made every day, and margins are under pressure. Broadly speaking, the same applies to ticketing and couponing. Another difference is that the service that Passbook will offer is not unique. Apple cannot control the distribution of those services in the same way it has managed to gain control over digital music. Apple was early to recognize the potential of digital music and has managed to lock out competing music stores from selling through Apple devices. That would not be so straightforward a second time, as tickets and coupons can be delivered in many ways.

So in the first stage, Apple will not build a real mobile wallet. It will leave that to the developer community. Apple will not generate its own QR-codes, but aggregate the codes generated by merchants, who are free to choose a payment method. The merchant must develop a platform that handles the QR-codes and metadata attached to them. It is there that payment service providers like Adyen see opportunities. The Amsterdam based company develops hosted payment solutions for online and mobile commerce. The number of merchants using m-payment will grow, and so will the need for a payment provider. Apple is still after all mostly a hardware company.

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